Item Number: _______9a_Supp_1___
Date of Meeting: __October 6, 2009___
Aviation Division
2010 Preliminary Budget
Operating Budget
Capital Budget
Business Plan Forecast
Commission Budget Workshop
October 6, 2009

1

Financial Goals
Airline side of business:
Manage growth in passenger airline cost per enplanement
(CPE):
Drive future CPE below November 2005 forecast through 2012
(basis of airline agreement - SLOA)
Maintain rates & charges debt service coverage at 1.0x
Non-airline side of business:
Grow Net Operating Income (NOI)
Mitigate declines associated with reduced passenger levels
Provide cash flow to meet/exceed debt service coverage of
1.25x
Generate excess cash flow to facilitate airline cost offsets
Division:
Maintain unrestricted cash and investments equal to at least
10 months of O&M costs

2

Enplanement Forecast
17,000
5 Year Recovery
Year  Assumption
16,500
2009      -4.5%
2010      0.0%   16,000
2011      1.0%
2012      2.5%   15,500
2013      2.7%
15,000
2014      2.7%
14,500
2007     2008     2009     2010     2011     2012     2013     2014
Not typical recovery; no sharp rebound
Travel demand may pick up in late 2010 as economy improves, but capacity cuts
and/or increased fares may dampen demand
Growth rate in out years reflects FAA long-term forecast (2.7%)
Continuing to review and refine forecast
3

Operating Budget Overview
2010 Enplaned Passengers  flat (0% change)
Revenues:
Non-airline revenues down 8.3%
Airline revenues up 4.5% due to increased capital costs
Expenses:
Aviation Division achieved targeted 5% reduction with two
exceptions
Aviation O&M decreasing by $3.2M, or 2.4% (including
exceptions)
NOI down $629K, or -0.4%
CPE: $12.70, less than $12.88 projected last year for
2010
4

Budget Target
$000s
2009 Budget                 132,665
Transfer Airport Jobs                   (176)
Transfer Commute Trip Reduction          (97)
Exclude Environmental Reserves        (1,187) 
Aviation Baseline Budget          131,204
Targeted 5% reduction               6,560 
2010 Division Budget Target        124,644


5

Budget Target & Cost Drivers
2010 Budget Target                 124,644 
2009 Approved Budget                132,665 
Exclude Envrionmental Reserve             (1,187)
Transfers to Corporate                     (273)
Budget Cuts and Savings                 (7,485)
One-time Items in 2009 Budget              (4,137)
Costs Absorbed:
Salary, wages and benefits                2,344 
Facility maintenance                      920 
Total                              3,264 
New initiatives                        1,798 
Total budget before exceptions           124,644 
Proposed Budget Target Exceptions:
Costs offset by new revenues (in 2010)        1,795 
Proposed 2010 Baseline Budget          126,439 

6

Budget Cuts & Savings
Cuts and Savings:            $000s   FTEs
Operations                 2,038    (30.4) 
Business Development           105     (1.0) 
Utilities                             802
Airport Director's Office             270      (2.0) 
Fire Department                240     (2.0) 
Facilties & Infrastructure            274      (2.0) 
Maintenance               2,092    (27.0) 
Security                     1,158     (23.0) 
Other                     506     (3.0) 
Total Cuts and Savings        7,485    (90.4) 

Reduced 90.4 FTEs
Renewable energy purchase eliminated
7

Facility Maintenance Costs
Facility Maintenance Costs              $
Elevator & escalator maintenance              750 
Replace broken CTE furniture                 70 
Runway maintenance                   100 
920 

Elevator and escalator breakdowns have been a major
customer service problem in 2009. 2009 budget is
$140,000. Expect to spend about $1 million.
Newer runways require more rubber removal

8

New Initiatives
Description                        $
Real Estate development support              250 
Part 150 Noise Study (non-grant funded)          200 
Add Sr. Business Dev. Analyst (1.0 FTE)          78 
ATR Support - consortium                   70 
Enplaned passenger survey                 100 
Contingency for emergency response:
Snow and flood                       500 
Increase division contingency                 600 
1,798 


9

Proposed Target Exceptions
$
Budget Exclusion: Environmental Reserve
2009 Budget                        1,187 
2010 Budget Increase                   1,784 
2010 Total                          2,971 
Costs Offset by New Revenues (in 2009)
Part 150 Study (grant funded portion)            800 
South Access Study (City of SeaTac)            450 
Lounge on South Satellite                   545 
1,795 
Capital projects driving asbestos costs include:
CUSE expansion ($500K)
Escalator renewal and replacement ($500K)
Elevator modernization ($383)
Delta Sky Club ($700K)
PC Air ($310K)
10

Expense Summary by Department
2008    2009    2010    '10-'09 Change
Figures in $ 000   Actual    Budget    Budget   Change     %
Airport Operations            34,917         32,179         31,031         (1,149)   -3.6%
Business Dev & Mgmt         3,951        4,590        3,696     (894)  -19.5%
SeaTac Utilities - Total          12,884         13,952         13,147           (805)    -5.8%
Aviation Maintenance         48,923        46,508        45,458         (1,050)   -2.3%
Fire Department            14,962        10,654        11,359          705    6.6%
Airport Security               7,511         6,868         6,075      (793)   -11.5%
AV Environmental            3,207        3,909    3,883      (26)   -0.7%
Aviation Director's Office         3,194         3,147         1,394    (1,753)   -55.7%
AV Facilities & Infrastructure      1,843         1,936     1,685      (251)   -13.0%
AV Planning               1,744        1,718    1,720       2     0.1%
Other (Excl AV PMG)         6,159        6,017    6,992     975   16.2%
Baseline O&M          139,295  131,478  126,439   (5,039)   -3.8%
Environmental Reserve         2,542        1,187    2,971    1,784   150.3%
Total Aviation            141,837   132,665   129,409    (3,255)        -2.5%


11

FTEs
FTEs    %
2009 Budget            833.1
Approved in 2009             2.0
Transfer out 2009             (1.0)
Eliminated in 2009            (14.0)
Adjusted 2009            820.1
FTEs reduced:
2010 Budget                           Operations  30.4
Eliminated                (76.2)             Security    23.0
Baggage Manager           1.0
Maintenance 27.0
Sr Business Analyst           1.0
Other     10.0
0.5 Emergency Mgmt Intern      0.5
Net changes             (73.7)          Total Eliminated 90.4
Proposed 2010 Budget      746.4  -10.4%

12

Aeronautical Key Indicators
2008    2009    2010    10-09 Bud Var
Actual   Budget   Budget   Var $   Var %
Enplaned Passengers        16,085   15,800   15,361     (439)   -2.8%
Aeronautical Cost KPIs
Capital Costs / Enpl           5.07     5.09     6.04     0.95    18.8%
Operating Costs / Enpl         8.15     8.10     8.27     0.18    2.2%
Offsets                   (1.30)    (1.24)    (1.47)    (0.23)   18.8%
Other Aero Revenues         0.79     0.90     0.98     0.08    8.4%
Non-passenger Airline Costs     (0.81)    (0.94)    (1.11)    (0.18)   18.7%
Passenger Airline CPE       11.89    11.90    12.70     0.80    6.7%
Capital costs are driving CPE increase

13

Non-Airline Business
2008     2009     2009     2010   10-09 Bud Change
Figures in $000s    Actual     Budget    Forecast    Budget    Var $   Var %
Revenues:
Public Parking                   59,111          57,377          51,963          51,812         (5,565)  -9.7%
Rental Cars                     35,592         35,867         33,850         31,424         (4,444) -12.4%
Concessions                  33,181         32,821         29,998         29,953        (2,869)  -8.7%
Other                        22,644         22,324         21,300         22,818          494      2.2%
Total Revenue                 150,528         148,389         137,111         136,006         (12,383)  -8.3%
Operating Expense             61,279        60,329        57,284        56,659        (3,670)  -6.1%
Share of terminal O&M             16,396         18,105         17,183         17,253          (851)      -4.7%
Less utility internal billing              (13,515)           (16,848)           (16,848)           (13,654)           3,193  -19.0%
Net Operating & Maint              64,160         61,586         57,620         60,258         (1,328)  -2.2%
Non-Aero Net Operating Income     86,367        86,803        79,491        75,748       (11,055) -12.7%
Gross Profit Margin               57.4%     58.5%     58.0%     55.7%    (0.03)  -4.8%
2010 revenue budget is only 0.8% below 2009 forecast
Pricing changes will mitigate drop in parking revenues
Adjusted MAGs for rental car companies effective 11/1/09
New Lounge revenues included in Other
2010 O&M costs include CDD tenant work on Rental Car Facility and
new lounge costs
14

Non-Airline Key Indicators
2008     2009     2009     2010   10-09 Bud Change
Actual    Budget   Forecast   Budget    Var $  Var %
Revenues / Enplanement
Parking                        3.67      3.63      3.38      3.37    (0.26)  -7.1%
Rental Car                       2.21      2.27      2.20      2.05     (0.22)  -9.9%
Concessions                   2.06     2.08     1.95     1.95    (0.13)  -6.1%
Other                         1.41      1.41      1.39      1.49     0.07   5.1%
Total Revenue                   9.36      9.39      8.93      8.85    (0.54)  -5.7%
Primary Concessions Sales / Enpl      10.29     10.19      9.62      9.78    (0.41)  -4.0%

Parking, rental car and concessions impacted by
economic conditions
Modest improvement in Concessions Sales per
Enplanement from 2009 forecast
15

Division Summary
2008    2009    2009    2010   '10-'09 Bud Change
Figures in $000s    Actual    Budget   Forecast   Budget      $ %
Revenues
Total Airline Revenues            204,361         202,913         195,499         212,042           9,128         4.5%
Total Non-Airline Revenues         150,528         148,389         137,111         136,006          (12,383)    -8.3%
Fuel Hydrant                   3,440    8,704    8,704    8,353      (351)       -4.0%
Total Revenues                358,329        360,006        341,314        356,401          (3,605)        -1.0%
Airport Expenses              140,157        131,478        125,004        126,439          (5,039)        -3.8%
Corporate Expenses             52,484        56,856        52,525        57,135          279       0.5%
Baseline O&M             192,641       188,334       177,529       183,574         (4,760)       -2.5%
Environmental Reserve             2,542    1,187     792    2,971     1,784       150.3%
Total Aviation                195,183   189,521        178,321        186,545          (2,976)        -1.6%
Net Operating Income         163,146        170,485        162,993        169,856          (629)       -0.4%
Key Measures
Passenger Airline CPE            11.87    11.90    11.78    12.70     0.80    6.7%
Non-Aeronautical NOI ($000s)       86,367        86,803        79,491        72,791         (14,012)   -16.1%
Debt Service Coverage             1.40        1.44     1.38     1.36     (0.09)        -5.9%
Traffic                                                        Change vs 09 Fcst
Enplanements               16,085        15,800        15,361        15,361 -       0.0%
Landed Weight               21,516        21,281        20,231        19,950          (281)       -1.4%
Expense reductions largely offset revenue drop vs. 2009 budget to
maintain NOI.
16

Budget Summary vs. Financial Goals
Aeronautical: manage growth of CPE:
2005 forecast of 2010 CPE:    $14.87
2008 forecast of 2010 CPE:    $12.88
2010 budget for CPE:       $12.70
CPE reduction measures incorporated into budget:
FIS offset to $7.0 million (target $6.00 per passenger)
Use of 90% of PFCs to offset revenue bond debt service
Non-aeronautical: Can't offset revenue declines with
cost reductions.
Budget is conservative
Continuing efforts to identify ways to enhance revenues

17

Capital Budget Overview
Focus:
Renewal and replacement
Customer needs
Opportunistically promote common use
Capacity enhancement projects deferred
Most elements of Comprehensive Development
Plan have been deferred
Proposing to delay reconstruction of Runway
16C for five years
Initiate design in 2010
18

Capital Budget 2005 - 2014
$450
Allowance/CDP
$400                  Rental Car Facility
Other CIPs
$350

$300

$250

$200

$150

$100

$50

$0
2005 Act  2006 Act  2007 Act  2008 Act  2009 Fcst  2010 Fcst  2011 Fcst  2012 Fcst  2013 Fcst  2014 Fcst

19

Projects Moving to BP Prospective (Status 2)
Figures in $000s    2010       2011 - 14        $000's
Aeronautical New
GSE Electrical Charging Station               1,510      12,900      14,410
SSAT Delta Sky Club Expansion               300      3,700      4,000
C1/C60 BHS Connections                  100      6,900      7,000
Total                   1,910      23,500      25,410
Aeronautical Renewal & Replacement
RW 16C/34C Design (Construction in 2016)        500        500       1,000
Elevator/Escalator Moderization Program          688      19,046      19,734
Roof Replacement Program Phase 1             85      2,085      2,170
Paint Striper Equipment                      380   - 380 
Claim Device 14 Replacement -      4,000    4,000
Total                   1,653      25,631      27,284
Non-Aero New
28th Ave Property Acquisition                 2,100        300       2,400
ESP Web Portal                       300   - 300 
Total                   2,400        300       2,700
Non-Aero Renewal & Replacement
Elevator Modernization Program -      3,000    3,000
Parking Retrofit                             300       7,300       7,600
Parking Garage Lighting Retrofit                 100       1,400       1,500
Total                    400      11,700      12,100
Total New Projects                     6,363      61,131      67,494

CIP By Major Project
figures in $000's   2010      2011      2012      2013      2014      Total
Description
Rental Car Facility               157,918         89,387        16,250 - -       263,555
Renew/Replace 42 Escalators        9,000       15,000       15,000       15,353 -       54,353
Third Runway                 5,549       12,909        3,824 - -       22,282
Aircraft RON Parking USPS Site       5,100        1,000       37,800 - -       43,900
Highline School Insulation             521      21,400 -      15,700 -        37,621
Central Plant Pre-Conditioned Air      10,500        10,000        11,269 - -       31,769
North Expressway Relocation        13,000        4,000 - - -       17,000
Airfield Pavement Replacement        600      6,000        6,000        6,000        6,000        24,600
Elevator/Escalator Moderization         688       9,469        4,485        5,092 -       19,734
CDP Future Projects -    1,000    7,682    1,200    7,500     17,382
Allowance CIPs                13,061       30,019       54,499       67,107       76,000        240,686
Other (136 projects)              120,846        106,726         64,131        25,423        12,996         330,122
Total                      336,783        306,910        220,940        135,875        102,496        1,103,004



21

Risks & Opportunities
Risks:
Economic conditions remain uncertain
Airlines may adjust schedules further
Opportunities:
Improving economy could increase enplanements
and non-airline revenues


22

Business Plan Forecast
$in 000s  2009 Bud     2010       2011       2012       2013       2014
Airline Revenue             $201,864   $211,031   $219,426   $235,257   $255,538   $264,131
Non-Airline Revenue          148,289   136,006   138,618   144,113   150,942   156,094
Other Revenue (Excl Fuel Hyd)     1,553     1,539     1,555     1,571     1,587      579
Total Revenue             351,706   348,576   359,599   380,941   408,067   420,804
Operating Expense           189,421   186,546   191,510   197,106   203,073   209,199
Net Operating Income (NOI)      162,285   162,030   168,089   183,835   204,994   211,605
Non-Operating Income          7,240     7,065     7,399     6,282     6,458     6,650
Available for Debt Service        169,525    169,095    175,488    190,117    211,452    218,255
Debt Service               (151,899)  (176,833)  (182,964)  (199,212)  (218,275)  (224,531)
Debt Service paid by CFCs         -      20,048    20,048    20,048    20,048    20,048
Debt Service paid by PFCs       33,762    32,257    32,785    34,114    35,590    37,096
Net Cash Flow              51,388    44,567    45,357    45,067    48,815    50,868
Key Measures
Total Airport Coverage            1.43      1.36      1.35      1.31      1.30      1.30
Rates and Charges Coverage       1.00     1.00     1.00     1.00     1.00     1.00
Passenger Airline CPE          11.90     12.69     13.09     13.72     14.57     14.67
CPE - Nov. 2005 (SLOA)         14.15     14.87     15.47     16.49     16.69     17.65
Reduction in CPE              (2.25)     (2.18)     (2.38)     (2.77)     (2.12)     (2.98)

CPE Forecast
$22.00


$20.00


$18.00
CPE $16.00
$14.00

Nov-05 (SLOA)
$12.00
Nov-08
Oct-09
Oct-09 $2010
$10.00
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